Tag: Greece

Yesterday Ireland joined Greece and Portugal in the credit rating ‘junkyard’ as Moody’s downgraded its debt to Ba1 level. The agency also put the country on a negative outlook, meaning that further downgrades are likely.

Ireland’s response is one of understandable frustration, as it has until now been widely commended for ‘getting with the programme’ and implementing harsh austerity measures. More interesting is the furious reaction of EU leaders, perhaps reflecting the fact that recent downgrades are less a verdict on the Irish or Portuguese economies than a condemnation of Europe’s collective failure to get to grips with a crisis that still threatens to engulf its single currency.

We have had the hamartia – the tragic flaw in the system that allowed high-spending countries to free ride on low interest rates. We have had the hubris – the belief the good times would never end. We have had nemesis – disaster. We now need the anagnorisis …

So says the proud Eurosceptic, classical scholar and Mayor of London, Boris Johnson. But the epiphany for which he yearns is “the moment of recognition that Greece would be better off in a state of Byronic liberation, forging a new economic identity with a New Drachma. Then there will be catharsis, the experience of purgation and relief.”

In the wake of yet another cautious statement from Angela Merkel on the proposed Greek rescue package, the authors of the Eurointelligence daily news bulletin worry that “this crisis could go all the way.”